Online Marketplace Fraud Prosecutions
1. Introduction
Online marketplace fraud involves deceptive practices in e-commerce platforms, where sellers or buyers engage in criminal acts to gain financial advantage. Common forms include:
Selling counterfeit or non-existent goods
Payment fraud (chargebacks, fake payment confirmations)
Identity theft or account takeover
Misrepresentation of products or services
Phishing and scams targeting marketplace users
Legal significance:
Online fraud is prosecuted under national criminal codes as fraud, embezzlement, or computer crimes.
Regulators increasingly rely on cybercrime laws and consumer protection statutes.
Objective of prosecution:
Protect consumers and businesses
Maintain trust in digital marketplaces
Punish perpetrators and deter others
2. Legal Framework
Finnish Penal Code (Rikoslaki 39/1889):
Chapter 36, Section 1: Fraud
Chapter 38: Computer-related crimes (unauthorized access, data interference)
Chapter 36, Section 9: Aggravated fraud (e.g., large sums or organized schemes)
EU Law:
Directive 2013/37/EU & E-Commerce Directive: Obligations for online service providers
Consumer Rights Directive: Protects buyers in online transactions
International cooperation:
Europol and Interpol assist in cross-border online marketplace fraud investigations
3. Case Law Illustrating Online Marketplace Fraud Prosecutions
Below are six notable cases:
Case 1: KKO 2013:45, Supreme Court of Finland
Issue: Sale of non-existent goods on an online marketplace
Facts:
Defendant listed expensive electronics online, took payments, but never delivered the products.
Holding:
Convicted of fraud under Chapter 36, Section 1 of the Penal Code.
Court considered intent to deceive and financial damage to multiple victims.
Importance:
Set precedent that online listings constitute legally binding offers, and failing to deliver with fraudulent intent is criminal.
Case 2: Helsinki District Court, R 2015:23
Issue: Fake payment confirmations
Facts:
Defendant sent fake bank transfer receipts to sellers to obtain goods without payment.
Holding:
Convicted of fraud and aggravated fraud due to systematic deception.
Ordered restitution to victims and imprisonment for 1 year.
Importance:
Highlights that manipulating payment systems is prosecutable as fraud.
Case 3: Turku Court of Appeal, R 2017:12
Issue: Account takeover and resale of products
Facts:
Hacker gained unauthorized access to user accounts on a marketplace and resold items for profit.
Holding:
Convicted for unauthorized computer access (Chapter 38, Section 3) and fraud.
Sentence: 2 years imprisonment.
Importance:
Clarifies that cybercrime and fraud laws overlap in online marketplace cases.
Case 4: KKO 2018:22, Supreme Court
Issue: Organized online marketplace scam
Facts:
Group of individuals created multiple fake seller accounts, listed high-value items, and collected payments without delivery.
Holding:
Convicted for aggravated fraud and organized crime.
Prison sentences ranged from 2 to 4 years; fines imposed for restitution.
Importance:
Illustrates prosecution of organized fraud rings in e-commerce platforms.
Case 5: Oulu District Court, R 2019:7
Issue: Sale of counterfeit goods
Facts:
Seller marketed branded electronics and clothing, which were counterfeit.
Holding:
Convicted under fraud and trademark infringement laws.
Court required destruction of counterfeit products and payment of damages.
Importance:
Confirms that counterfeit goods sold online are punishable under both criminal and intellectual property laws.
Case 6: Helsinki Court of Appeal, R 2020:11
Issue: Phishing scheme targeting marketplace users
Facts:
Defendant sent fraudulent emails to users, redirecting them to fake login pages to steal credentials and funds.
Holding:
Convicted for computer fraud and unauthorized access, sentenced to 18 months imprisonment.
Court emphasized the importance of protecting digital marketplaces from phishing attacks.
Importance:
Reinforces liability for indirect fraud and cyber-enabled deception.
Case 7: KKO 2021:15, Supreme Court
Issue: Refund scams on online marketplaces
Facts:
Defendant falsely claimed non-delivery of purchased items to obtain refunds while retaining products.
Holding:
Convicted for fraud and attempted aggravated fraud.
Sentences included imprisonment and restitution orders.
Importance:
Highlights prosecution for abuse of consumer protection processes in online marketplaces.
4. Key Takeaways
Fraudulent intent is central:
Courts assess whether the perpetrator intended to deceive marketplace users.
Overlap of laws:
Fraud, cybercrime, IP infringement, and consumer protection laws are all relevant.
Restitution is common:
Courts order full restitution to victims alongside imprisonment or fines.
Organized and repeat offenders:
Heavier penalties apply to organized schemes or repeat offenders.
Digital platforms’ responsibility:
While individuals are primarily liable, marketplace operators may face civil liability if negligent in monitoring fraud.
RELATED Blog
0 comments